Options Brief: Genomic Health (GHDX)

GHDX – Genomic Health, Inc. – The biotechnology company, which focuses on developing genomic-based clinical diagnostic tests for cancer that allow physicians and patients to make individualized treatment decisions, popped up on our ‘hot by options volume’ market scanner due to bullish activity in the August contract. Genomic Health’s shares fell 2.05% in the first half of the session to touch down at an intraday and new 52-week low of $12.26, but the stock bounced up off the day’s low point and is currently 2.40% higher to stand at $12.82 by 2:05 pm (ET). It looks like one bullish individual populating GHDX today feels Genomic Health’s shares have bottomed out and are unlikely to head much lower ahead of August expiration day. The optimistic investor sold short 2,000 puts at the August $12.5 strike to take in premium of $0.80 per contract. The put seller keeps the full premium received on the trade as long as Genomic’s shares exceed $12.50 through expiration next month. The trader is obliged to have shares of the underlying stock put to him at an effective price of $11.70 each if the puts land in-the-money at expiration.

Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.

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